Articles of Association of Sichuan Golden Ants Biotechnology Development Co., Ltd.

Summary

This agreement sets out the Articles of Association for Sichuan Golden Ants Biotechnology Development Co., Ltd., a limited liability company in China, wholly owned by Golden Century Investments, Inc. It outlines the company's business purpose, capital structure, governance by a board of directors, and key management procedures. The document details the rights and responsibilities of the shareholder, board, and management, as well as rules for profit distribution, employee matters, and company dissolution. The agreement is governed by Chinese law and establishes the framework for the company's operations and decision-making.

EX-4.2 4 ex4_2.txt EXHIBIT 4.2 EXHIBIT 4.2 ================================================================================ SICHUAN GOLDEN ANTS BIOTECHNOLOGY DEVELOPMENT CO., LTD. ARTICLES OF ASSOCIATION ================================================================================ TABLE OF CONTENTS Articles Heading Chapter One General principles Chapter Two Business Purpose, Scope and Scale Chapter Three Total investment, Registered capital and Term Chapter Four Board of Directors Chapter Five Power of Board of Directors Chapter Six Procedure of Board of Directors Chapter Seven Management and Organization Chapter Eight Financing and Accounting Chapter Nine Profit Distribution Chapter Ten Employee Chapter Eleven Labor Union Chapter Twelve Period of duration, termination and Liquidation Chapter Thirteen Miscellaneous 2 CHAPTER ONE GENERAL PRINCIPLE ARTICLE ONE Sichuan Golden Ants Biotechnology Development Co., Limited (hereinafter said Company) is a corporation duly organized and validly existing under the laws of the People's Republic of China ("PRC"). Its shareholder is Golden Century Investments, Inc. ("Golden Century"). ARTICLE TWO Golden Century will incorporate a foreign invested company as a limited liability company under the Foreign Invested Enterprises Laws of PRC ("FIE laws of PRC) and other relevant laws and rules. The liabilities of Golden Century are limited to the registered capital of the Company subscribed by Golden Century. The Company shall be responsible for its liabilities to its creditors with all of its assets. Company's after tax profits and net assets after liquidation belong to Golden Century according to the laws. ARTICLE THREE Company's English name: Sichuan Golden Ants Biotechnology Development Co., Ltd. Company's Chinese Name: [NOT IN ENGLISH] Company's registered address: 19/F, l.Tongmei Building, 76 One Section of Jianshebeilu, Chengdu, China. ARTICLE FOUR All activities that Company engages in are governed by enacted PRC laws, codes and other regulatory documents and publicly available. CHAPTER TWO 3 BUSINESS PURPOSE, SCOPE AND SCALE ARTICLE FIVE Company's business purpose: to establish a new management mechanism and contribute to vitalizing local economy by the shareholder' investment in a limited liability company. ARTICLE SIX Company's business scope includes ants breeding and technical services, development, research and sale of ants products. ARTICLE SEVEN Company has the power to carry out business activities under the PRC laws and regulations in order to conduct business within its business scope. CHAPTER THREE TOTAL INVESTMENT, REGISTERED CAPITAL AND TERM ARTICLE EIGHT The total investment of the Company is RMB2,800,000. ARTICLE NINE The registered capital of the Company is RMB2,000,000, contributed in cash in USD. ARTICLE TEN Golden Century becomes Company's shareholder by acquisition and Company's status is thus changed to a wholly foreign owned enterprise. 4 ARTICLE ELEVEN 1. Company shall not reduce the registered capital within the period of duration. 2. Registered capital may be increased and transferred upon the approval of the Board of the Directors and the approval of the original examination and approval authority. ARTICLE TWELVE Golden Century should pay the consideration to the shareholders who transferred their shares in the Company within 3 months from the date Company's business license as a wholly foreign owned enterprise is issued. ARTICLE THIRTEEN After payments of shares transfer price, Golden Century should acquire the Foreign Exchange Registration Certificate to evidence the full payment of share purchase price from the Administration of Foreign Exchange according to "The Provisional Regulations for Merger and Acquisition of Domestic Enterprises by Foreign Investors". CHAPTER FOUR BOARD OF DIRECTORS ARTICLE FOURTEEN Board of Directors is the highest authority of the Company and shall have the right to determine all the major issues regarding the Company, according to the articles of association of the Company. ARTICLE FIFTEEN Board chairman Yi SHEN ("Chairman") is the legal representative of the Company. If the Chairman is unable to perform his duties for certain reasons, he shall authorize one of the other Directors to perform his duties until he can perform the duties by himself. ARTICLE SIXTEEN 1. Board of Directors consists of three directors ("Director"). 5 2. Golden Century may determine to increase or decrease the number of Directors in the Board of directors through lawful procedures. ARTICLE SEVENTEEN Chairman and other Directors shall be appointed by Golden Century for each term of no longer than 3 years and may serve consecutive terms if re-appointed by Golden Century. Before the expiration of the term of each Director, Golden Century shall have the right to determine removal of each Director. All appointment and removal shall be effected by notice in writing sent to or delivered in person to the Chairman. Golden Century can fill in any vacancy at any time in accordance with these Articles of Association. ARTICLE EIGHTEEN 1. A Director may appoint an agent to represent himself and withdraw the appointment any time. 2. All notice concerning appointment and removal of an agent shall be in writing sent to or delivered in person to chairman. 3. The agent has the right to attend meetings and to vote at the meetings on behalf of the director who is not available to attend the meetings and authorizes the agent. 4. A Director is responsible for preparing all notices and necessary documents concerning proxy. 5. One Director may be appointed as the agent of another director. 6. One person may be appointed as an agent for several Directors. The agent has one vote for each appointer and has one more vote for him in the event that the agent himself is a director. 7. Director may invite expert to attend the meetings of the Board. (Experts have no voting rights.) ARTICLE NINETEEN The Board of Directors may appoint a secretary within the term, condition and duties prescribed by the Board of Directors and may remove the appointed secretary any time. 6 ARTICLE TWENTY Director should perform the duties diligently, orderly and carefully. Company shall not cause any director to bear any responsibilities as a result of performing their duties as a director unless the director abuses his rights or is grossly negligent. ARTICLE TWENTY ONE 1. Golden Century may determine the emoluments of all Directors. 2. The Company shall pay all reasonable expenses (traveling, hotel and meal) incurred by Directors or their agents and the secretary while attending meetings of the Board of Directors. CHAPTER FIVE POWERS OF BOARD OF DIRECTORS ARTICLE TWENTY TWO The Board of Directors is responsible for decision-making and supervision of management. Among other things, the Board of Directors shall determine the following matters: 1. To appoint and dismiss managing and administrative members (hereinafter say "the members") and determine their emolument;. 2. To select and dismiss external auditor; 3. To approve Company's basic policies; 4. To approve and alter Company's organization structure; 5. To approve and alter procedure of the administrative organization; 6. To approve the members' rights and duties; 7. To approve investment plan and make investments; 8. To approve human resources plans; 9. To approve welfare and benefits plans; 10. To approve sale and post-sale services policies; 11. To set down pricing principle; 12. To provide a loan and to issue a guarantee for loans; 13. To acquire another company, to incorporate, close and dismiss subsidiary company; 14. To merge with other operating entity; 7 15. To increase Company's registered capital and to amend these articles of association; 16. To transfer all or part of the Company's registered capital; 17. To approve Company's budget; 18. To draw reserve fund, staff rewards and welfare fund, and to approve and distribute net profit; 19. To approve annual report, assets and liability statement and profit and loss statement; 20. To approve management's contracts and agreements provided for in the detailed rules of management. 21. To extend the duration of Company and to terminate the Company, and; 22. Any other matters that should be determined by the Board of Directors. ARTICLE TWENTY THREE The Board of Directors may publish the detailed rules of management which should be followed in Company's daily business and managing operation. CHAPTER SIX PROCEDURES OF BOARD OF DIRECTORS ARTICLE TWENTY FOUR The Board of Directors meeting shall be held at least twice a year. Chairman or at least two directors may convene temporary meeting of the Directors. ARTICLE TWENTY FIVE The meeting should be held on Company's registered address unless otherwise determined by the Chairman. ARTICLE TWENTY SIX 1. Chairman shall convene and preside the Board of Directors meetings and may appoint any other director to do so. 2. Notice of the Board of Directors meetings shall be give at least 3 days in advance. 8 The notice may be given in less than 3 days if all the directors agree in writing. The notice of meeting should be in writing and may be sent by fax. ARTICLE TWENTY SEVEN Chairman shall determine the time and place of the Board of Directors meetings. ARTICLE TWENTY EIGHT The quorum of all the Board of Directors meetings is at least 3 Directors. They may attend meetings by themselves or by appointing agents. The meeting cannot be convened if a quorum is not present. ARTICLE TWENTY NINE 1. Chairman or the Director presiding over the Board of Directors meetings shall determine the agenda of the meetings. Directors or their agents should receive all documents 3 days in advance before the date of the meeting. The documents may be sent by fax. 2. The Board of Directors meeting shall follow the agenda. Every proposed matter shall be fully discussed before a resolution is made. The matter not originally included in the agenda may be discussed upon approval of majority directors or agents present at the meeting. ARTICLE THIRTY 1. Each member of the Board of Directors or the director's agent appointed when the Director is not available has one vote. 2. The following resolutions should be approved by all the Directors present at the meeting: a) To increase Company's registered capital; b) To amend the articles of association of the Company; c) To transfer all or part of Company's registered capital; d) To merge with other economic entities; e) To extend Company's duration or terminate Company; f) Any other resolution that should be approved unanimously in accordance 9 with PRC laws. 3. The Board of Directors shall decide on other matters of the Company by simple majority of the Directors. 4. Abstained voting shall not be counted. ARTICLE THIRTY ONE At any meeting of the Board of directors a resolution shall be made by a show of hands unless other voting means is adopted by the simple majority of Directors (or their agents) present at the meeting. ARTICLE THIRTY TWO The language used in the meeting of Board of Directors is Chinese (Mandarin). ARTICLE THIRTY THREE 1. All the meetings of Board of Directors shall have Chinese minutes. The contents of such minutes include: a) Place, date and agenda of the meeting; b) Names of Directors, agents or experts present at the meeting. c) All resolutions passed on the meeting and description of the meeting in detail. 2. After approval, every meeting's minutes shall be signed by all directors or agents present and kept in the Company's headquarter located at 19F, Tongmei Building, 76 One Section of Jianshebeilu, Chengdu city, Sichuan Province. ARTICLE THIRTY FOUR A written resolution passed in the Board of Directors' meeting shall become effective when it is signed by all the Directors. ARTICLE THIRTY FIVE 10 Board of Directors may authorize any one of his powers to a committee consisting of appropriate directors. The committee so formed should follow all the rules stipulated by the Directors when performing the authorized power. CHAPTER SEVEN MANAGEMENT AND ORGANIZATION ARTICLE THIRTY SIX Management organization consists of one or several members, depending on the decision of the Board of Directors. ARTICLE THIRTY SEVEN 1. Management organization is led by a general manager whose duties are regulated in detailed rules of Company. 2. General manager represents the Company in the meeting of Board of Directors and has the right to attend the meeting unless otherwise decided by the Board of Directors. ARTICLE THIRTY EIGHT 1. Management organization performs the following rights and duties: a) To prepare for meeting of Board of Directors b) To carry out the resolutions and directions of the Board. c) To organize and direct Company's daily management. 2. Management Organization's rights are regulated in detailed rules of management. ARTICLE THIRTY NINE 1. The members of the management organization shall be appointed by the Board of Directors for a term of up to 3 years and may serve consecutive terms if re-elected. The 11 Board of directors may withdraw the appointment at any time when the members materially breach their duties or lose the ability to manage the Company. 2. The members may not work for any other economic organization without the prior approval of the Board of Directors. ARTICLE FORTY The members should perform the duties with due diligence and care. Company shall not cause any members of the management organization to bear any responsibilities as a result of performing their duties unless the member abuses his rights or is grossly negligent. ARTICLE FORTY ONE The members of management organization may propose concerning the Company's organization and the proposal shall be approved by the Board of Directors. CHAPTER EIGHT FINANCING AND ACCOUNTING ARTICLE FORTY TWO Company's financing and accounting system shall be in compliance with relevant PRC laws and regulations. ARTICLE FORTY THREE The fiscal year adopted by the Company should be from the date of January 1st to the date of December 31st of each calendar year. The first fiscal year of the Company shall be from the date on which the business license of the Company is issued to the date of December 31st of this year. ARTICLE FORTY FOUR All vouchers, accounting books, statements and reports shall be written in Chinese. 12 ARTICLE FORTY FIVE The Company should adopt RMB as book keeping currency. Foreign currency may be exchanged subject to PRC laws and regulations. ARTICLE FORTY SIX Company shall open RMB account and any one kind of foreign currency account in the bank which has been approved by Board of Directors and approved by authority. ARTICLE FORTY SEVEN The following content shall be recorded in account book: 1. All income and payout of cash 2. All purchase and sale of material 3. Registered capital and status of liability 4. Increase and transfer of the registered capital. ARTICLE FORTY EIGHT 1. Management organization shall draw up the assets and liability statement and profit and loss statement of the last accounting year within the first three months of each accounting year. The statements shall be audited and signed by Company's auditor and be submitted to Board of Directors for approval. 2. besides the assets and liability statement and profit and loss statement provided in Article 48.1 and Article 46 management organization shall draw up reports, plans, forecast and any other statements required by the Board of directors from time to time and submit them to the Board of directors. ARTICLE FORTY NINE Golden Century has the right to hire employees or engage a foreign auditor to audit all vouchers, receipts, statements, accounting books and records and to carry out financial examination. 13 ARTICLE FIFTY Board of Directors shall determine the number of years for depreciation according to relevant regulations. ARTICLE FIFTY ONE All matters concerning foreign exchange shall be handled in accordance with relevant PRC laws. CHAPTER NINE PROFIT DISTRIBUTION ARTICLE FIFTY TWO 1. Company shall pay income tax according to application PRC tax laws. Company shall apply for all favorable tax treatment of which the Company can enjoy now or in the future. 2. Company may draw reserve fund, development fund and staff welfare fund after payment of tax in accordance with law. ARTICLE FIFTY THREE After payment of tax and drawing of all kinds of funds, the remaining profits shall be distributed to Golden Century unless otherwise decided by the Board of Directors. CHAPTER TEN EMPLOYEE ARTICLE FIFTY FOUR Employee's employment, dismissal resignation, wages, welfare treatment, insurance, safety, disciplines and other matters shall be handled according to relevant law and regulations 14 ARTICLE FIFTY FIVE An Employee required by the Company may be hired openly by public selection and examination. The Company will only hire qualified persons. ARTICLE FIFTY SIX In case there is an employee disobeying Company's regulations and rules, Company has the right to discipline, keep a bad record and reduce wages. With regard to serious violation, Company may dismiss the employee. The dismissal of employee shall be filed in local labor authority. ARTICLE FIFTY SEVEN Management organization shall determine the staff's wages according to Company's actual situation. ARTICLE FIFTY EIGHT The matters concerning employees include but not limited to welfare funds, rewards, safety and insurance shall be provided in the detailed rules of management. CHAPTER ELEVEN LABOR UNION ARTICLE FIFTY NINE 1. Employees of Company have the right to establish labor union as per applicable laws. The labor union may carry out activities according to Labor Union Law of PRC. 2. The labor union's activities may be provided in detailed rules of management. The activities shall be carried out after work and shall not affect Company's operation under any circumstances. 15 3. Company may allocate funds for the labor union according to relevant PRC laws. ARTICLE SIXTY Company's labor union shall conduct mediation when the disputes between employee and Company arise. CHAPTER TWELVE PERIOD OF DURATION, TERMINATION AND LIQUIDATION ARTICLE SIXTY ONE Company's period of duration ( "Duration") shall be 20 years from Company's establishment date ( "the Effective Date"). Company's establishment date is the date when the business license of the Company is issued. ARTICLE SIXTY TWO Board of Directors may apply for extending the Duration to the authority in charge of examination and approval according to PRC laws. ARTICLE SIXTY THREE 1. Company shall wind up operation if any of the following occurs: a) The Duration is expired and the Company hasn't applied for extension in accordance with Article 61; b) Golden Century decides to dismiss Company due to serious loss; c) Operation of the Company cannot be maintained due to heavy loss caused by natural disasters, wars or other force majeure events; d) Bankruptcy; e) Company is ordered to dismiss in accordance with laws; or f) Any other circumstances when Golden Century decides to dismiss Company. 16 ARTICLE SIXTY FOUR 1. A liquidation committee shall be set up and carry out liquidation when Company needs to liquidate ("liquidation") 2. Board of Directors shall form liquidation committee within 15 days from the date of liquidation as defined legally. The liquidation committee may be consisted of members of the Board or related professional person. 3. The liquidation committee shall perform the following rights and duties during liquidation: a) To liquidate Company's assets, draw up assets and liability statement and inventory of assets and formulate liquidation plan. b) To issue public notice informing unknown creditors and to inform in writing known creditors; c) To handle all the unfinished matters of Company concerning liquidation; d) To carry on appraisal and evaluation of assets and basis for calculation; e) To fully pay all unpaid tax; f) To liquidate creditor's rights and debts; g) To allocate surplus assets after discharge of debts; h) To represent the Company in civil matters; and i) To perform any other rights and duties by the liquidation committee may perform according to laws. ARTICLE SIXTY FIVE The liquidation committee shall lawfully perform its liquidation obligations and to deal with the matters concerning liquidation according to the principle of consultation. ARTICLE SIXTY SIX Board of Directors shall apply for special liquidation procedure to examination and approval authority in case that the liquidation committee fails to be formed or encounters significant obstacles during liquidation process. The special liquidation procedure shall be implemented according to relevant laws. ARTICLE SIXTY SEVEN 17 Golden Century may not remit or take Company's capital out of China and dispose of Company's assets unilaterally before the end of liquidation. CHAPTER THIRTEEN MISCELLANEOUS ARTICLE SIXTY EIGHT These articles of association of the Company are written in Chinese. English text may be added as requirement of Golden Century. Both texts have equal effects. ARTICLE SIXTY NINE 1. In case that newly published PRC laws and regulations adversely impact the interests of Golden Century stipulated in the articles of association of the Company, Board of Directors shall amend the articles of association of the Company so that they comply with the new laws and regulations and adverse impact on the Company (If any) can be reduced. 2. In case the new laws and regulations are more favorable to the Company or Golden Century, Board of Directors shall amend the articles of association of the Company so that the Company can enjoy the favorable treatment provided in the new laws and regulations to the largest extent. ARTICLE SEVENTY Board of Directors shall amend the articles of association of the Company in case any one article becomes void or unenforceable. ARTICLE SEVENTY ONE These articles of association are signed in quadruplicate in Chinese. ARTICLE SEVENTY TWO These articles of association shall become effective upon approval of authority 18 department. The same is true for any amendment of these articles of association. ARTICLE SEVENTY THREE These articles of association are subscribed by the authorized representative Golden Century on July 28th, 2004 in Chengdu city, Sichuan province. Golden Century Investments, Inc. /s/ Hong Yan Ma - ------------------ Authorized representative: Hong Yan Ma Position: Executive Director Nationality: China 19 ================================================================================ SICHUAN GOLDEN ANTS BIOTECHNOLOGY DEVELOPMENT CO., LTD. ARTICLES OF ASSOCIATION THE FIRST AMENDMENT ================================================================================ Content: The following have been discussed at the meeting of the Board of Directors and adopted unanimously: 1. To revise Article 52.2 of the articles of association of the Company from "Company may draw from reserve fund, development fund and staff welfare fund after payment of tax in accordance with law." to "Company may draw surplus accumulation fund and staff welfare fund after payment of tax in accordance with law." 2. To revise Article 53 from "After payment of tax and drawing of all kinds of funds, the remaining profits shall be distributed to Golden Century unless otherwise decided by the Board of Directors." to "According to resolution of shareholders meeting on Aug. 3rd, 2004, as of Mar. 31st, 2004, Golden Century Investments, Inc., the buyer, shall be entitled to un-allocated surplus profits of the Company in the previous accounting year. The profits generated thereafter shall be allocated in proportion to the percentage of the transfer price actually paid divided by the total transfer price due." This amendment is effective subject to approval by examination and approval authority and has equally legal effect with the original one. Golden Century Investments, Inc. /s/ Hong Yan Ma - ------------------ Subscriber: Hong Yan Ma Position: Executive Director Nationality: China